Clicks dispenses positive earnings surprise


Clicks dispenses positive earnings surprise

Published Date: 2019-10-08 | Source: Stephen Gunnion | Author: Stephen Gunnion

Clicks dispenses positive earnings surprise

The pharmacy and health and beauty retailer expects to beat its own full-year earnings forecast.

Clicks' shares rallied to a new all-time high yesterday after it said second-half earnings grew faster than expected. In a trading statement, it said it had revised its full-year forecast higher due to a stronger retail performance by its Clicks chain of stores, new distribution contracts at pharmaceutical distribution business UPD and further improvements in its working capital management.

The pharmacy, health and beauty retailer expects to report a rise of between 15% and 18% in full-year headline earnings per share (HEPS), up from growth of between 10% and 15% forecast when it released its interim results in April. At the time, it said growth had been held back by the constrained trading environment - and the threat of further load shedding.

Its first-half performance was supported by an 8.5% rise in health and beauty retail sales, with good volume growth and market shares gains across most product categories. The segment includes Clicks and the franchise brands of The Body Shop, General Nutrition Corporation (GNC) and Claire's. Sales were driven by competitive prices and store promotions. UPD increased first-half operating profit by 27% as it also grew its share of the market. It said its core health and beauty markets were resilient and its brands were well positioned to increase market share,

The group opened 17 Clicks stores in the first half of its financial year, taking its store footprint to 680, with a further 24 expected by the end of the period.

After trading as high as R248 yesterday, the company's shares closed 13.5% up at R247.75. Its results are scheduled for release on 24 October.

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